One fell swoop.
That’s how Kenny Kalfin, the owner and president of Santa Fe Tortilla Company, describes the county’s passage of a living wage ordinance.
On Feb. 25, all five Santa Fe County commissioners voted on a proposal by Liz Stefanics and Miguel Chavez to set a minimum wage for unincorporated parts of the county to $10.66 per hour.
Businesses like the tortilla maker will have start paying workers at least that rate by April 26.
Kalfin, who provides jobs for more than 80 people, says he supports the living wage, but criticizes county commissioners for being “foolish” in imposing what he describes as a dramatic cost increase on businesses within such a short time period. The new rate is 42 percent higher than the state minimum wage of $7.50, which is only a quarter higher than the federal wage floor of $7.25.
“All of my competitors all over New Mexico or all over the United States have not had this imposed on them in a 60-day time frame,” he says. “So they don’t have this dramatic increase in cost. We’re in a very competitive industry. And you know if I raise my prices I probably lose business. If I lose business, I lose employees. Or I go out of business.”
The federal minimum wage has failed to keep pace with inflation even with the last congressionally authorized increase in 2009. Meanwhile, state lawmakers could not agree on an increase to the state minimum wage during the 2014 legislative session. As a result, cities and counties have taken matters into their own hands by mandating that businesses pay minimum wages in their own jurisdictions. Critics argue the patchwork of different wage levels creates an unfriendly business environment, while supporters contend inaction on the federal level is hurting low-wage earners.
Moreover, the effort to increase the minimum wage is a national one. Santa Fe County adopted the living wage ordinance after receiving thousands of petition signatures amassed by members of Working America, a Washington DC nonprofit affiliated with the AFL-CIO.
For clues on how to implement the ordinance, the county can look to the city, which since 2004 has mandated one of the highest minimum wages in the nation.
Still, even the city’s enforcement of the rules is complaint driven, notes Assistant City Attorney Zach Shandler. Since 2007, he says, the city has prosecuted just two businesses for alleged violations of the living wage ordinance, and neither case resulted in punishment. Shandler says the city first tries to coax compliance with letters before resorting to court.
Both the city and county tie annual minimum wage increases to a regional Consumer Price Index, so wages go up in concert with inflation. A 15-cent hike took effect on March 2, kicking the city living wage from $10.51 to $10.66 an hour.
Tom Vimont, general manager of Weck’s restaurant, 2000 Cerrillos Road, says he doesn’t plan on raising prices with the latest increase. Vimont has been in the restaurant industry in Santa Fe for some 15 years—he was previously a managing partner at Steaksmith at El Gancho.
If prices increase, he says, a regular might opt to go to a competitor like Denny’s and cut into Weck’s volume. “If you’re packing the house then your margins are different,” says Vimont.
There’s one important distinction between the city and county rules: The county’s ordinance requires that businesses pay tipped employees a base wage that’s 60 percent of the $10.66 minimum wage, which is $6.40 an hour. Under the city’s ordinance, businesses are allowed to pay tipped employees the federal base wage for tipped employees of $2.13 an hour. In both cases, the employer must make up the difference if tips don’t generate the required minimum wage.
Vimont is careful not to have too many waiters and waitresses on staff on any given shift. That might mean shifts are tough for employees, but each one will likely earn better tips.
His remarks are echoed by findings of a 2007 University of New Mexico Bureau of Business and Economic Research report that studied the impacts of the living wage on the city’s economy and workforce. Workers interviewed in focus groups reported they got additional job responsibilities and took other hits including limits on overtime.
For Santa Fe Tortilla company employees, the wage increase might be a more of a small blessing than a jackpot. The quality of life has improved for workers interviewed for the study, but the workers said they still struggled to make ends meet. Three Santa Fe Tortilla Company employees testified in support of the ordinance to the county commission on Jan. 28, according to the meeting’s minutes. Yolanda Galaviz told commissioners she was on a committee that represents workers at the company.
“We have calculated that the raise would give us about $200 more a month,” she said in Spanish through a translator, “which would help us feed our families, because we’re barely making ends meet and pay[ing] our bills as it is.”